A plan to subsidise solar panels on homes was “one of the most ridiculous
schemes ever dreamed up”, a Government minister has said.

Lord Marland, an Energy minister, hit out at the cost of so-called feed-in tariffs, which the Government has axed as part of the cuts programme.

Last week Court of Appeal ruled that the sudden axing of the tariffs, which were brought in by the Labour Government on April 1 2010 under the Energy Act 2008, were unlawful.

Ministers are appealing that decision in the Supreme Court. If the Government loses its appeal, it will cost the taxpayer an extra £170million in subsidies.

In the House of Lords, Labour energy spokesman Baroness Smith of Basildon asked if it was a “good use of Government money to keep chasing this merry-go-round of court decisions the Government keeps losing”.

She added: “Wouldn't it be better to sit down with the industry and negotiate a way forward?” She said that everyone accepted there needed to be cuts to the tariff - which are worth £25,000 per household - but it had to be done in a way that protected jobs.

Lord Marland replied that it was a “curious old world” when the Government was criticised for its legal bill, which so far stood at £66,400 on the issue, when the consumer had been saved £1.5 billion as a result.

He said: “Let’s look at what we are taking to court here. This is one of the most ridiculous schemes that has ever been dreamed up.

“It is already going to cost the consumer £7billion for £400million of net present value. This is on a product where you need the electricity when the sun doesn't shine.

“It is going to produce 1.1 per cent of our electricity supply and it doesn't target the needy and the consumers.”

The Government wants to reduce feed-in tariff subsidies - payments made to households and communities that generate green electricity through solar panels - on any installations completed after December 12 last year.

Ministers believe the scheme was too generous and too expensive, but last week three appeal judges unanimously upheld a High Court ruling that Energy Secretary Chris Huhne lacks the power to introduce the controversial “retrospective” scheme.

Opponents of the change - which would see the tariff cut from 43p to 21p per kilowatt-hour generated - claim it would put 29,000 jobs in the solar industry at risk.

Lord Marland argued the industry was “still alive and well” and highlighted an email he had recently received.

He told peers: “It said: ‘Start a lucrative new career as a solar panel installer. At present, there is big demand for skilled solar panel installers in the UK. There is a great opportunity for you to retrain and have a rewarding new career’.”

Left unchecked, officials at the Department for Energy and Climate Change have suggested the tariffs would have added £300 to average household bills by 2020.